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Sunday, 17 February 2013

UNITED STATES: Why graduates are underemployed and overeducated

Deseret News16 February 2013Issue No:259

When Barack Obama first became president, he set the goal of increasing
America’s college graduation rate to 60% by 2020. But the idea of
working towards becoming a nation of college graduates has a major
problem, according to a report by the Center for College Affordability
and Productivity, writes Michael De Groote for Deseret News. There are not enough jobs that require a college degree.

Analysing 2010 data from the US Department of Labor, the report finds
that of the 41.7 million working college graduates, barely half (51.9%)
are working in jobs that require a bachelor degree or higher.
Thirty-seven percent are in jobs that require a high school diploma or
less. The rest (11.1%) are in jobs that require some post-secondary
training such as an associate's degree.

In other words, there are 13 million college graduates working in jobs that don't require a bachelor degree or more.

There are not enough jobs that require a college degree.
Analyzing 2010 data from the U.S. Department of
Labor, the report finds that of the 41.7 million working college
graduates, barely half (51.9 percent) are working in jobs that require a
bachelor's degree or higher. Thirty-seven percent are in jobs that
require a high-school diploma or less. The rest (11.1 percent) are in
jobs that require some postsecondary training such as an associate's
degree.
In other words, there are 13 million college graduates working in jobs that don't require a bachelor's degree or more.

The problem was driven home for the report's lead
author, economist Richard Vedder, when he needed some yard work done.
"One day I had some guy cut down a tree," he says. "He had a master's
degree in history."

So Vedder, the senior author of the report and
director of CCAP, says he started to research the phenomenon of
underemployed graduates — eventually leading to the report.Number of graduates soars

It wasn't always this way. In 2010 the proportion of
adults with degrees was 30 percent. This is five times higher than six
decades ago. In the 50s or 60s the percentage of college graduates was
in the single digits.

"When I started teaching in the (1960s) going to
college was still a somewhat unusual, slightly elitist thing to do,"
says Vedder, who is a Distinguished Professor of Economics Emeritus at
Ohio University. "Almost all graduates got a pretty good job. Even
graduates in middle-quality state schools always got jobs."

While the number of college graduates has soared, the
jobs that require that expertise hasn't — forcing an increasing number
of graduates to take jobs that historically didn't require a lot of
education.

It turns out, for example, that 15.4 percent of taxi
drivers have college degrees, 12.9 percent of parking lot attendants
have at least a bachelor's degree and 24.6 percent of retail sales
people have at least a bachelor's degree.

Earnings premium

Other studies (such as one at Georgetown University)
have shown the earnings premium of college degrees. College graduates
simply earn more than those who have just a high school diploma. This
increase in potential income is seen to justify the expense of spending
money on getting a degree.
The CCAP's report, however, says that although many
benefit economically from going to college, there are still many that do
not achieve those gains. Employers simply do not need as many college
graduates as the colleges are cranking out.

The study says this "over-credentialing" of the
population may also mean that society may be "over-investing" in higher
education instead of looking at alternatives such as vocational
training.
"Can you predict ahead of time if going to college is a good idea for someone?" Vedder says. "Yes, for a good number of people."

For example, if young people are average or below
average in their grades, Vedder recommends trying perhaps a community
college first. If they flourish, they may wish then to transfer to a
four-year institution.

"We need to be more nuanced and be careful when we say whether it is a good thing for a kid to go to college," he says.